City, Hamilton County Schools set to settle liquor-tax dispute

The back-and-forth dispute between Chattanooga and Hamilton County Schools officials over millions in delinquent liquor-by-the-drink taxes that the city owes may come to an end this week.

This morning's discovery hearing in the case was canceled, which Assistant City Attorney Phil Noblett confirmed was because the school system is writing a settlement agreement that he hopes to have all parties sign by the end of the week.

The school system filed a lawsuit in April after leaders said talks with Mayor Andy Berke's administration over more than $11.7 million in past-due, state-mandated liquor taxes were getting nowhere. Berke then offered to pay nearly $12 million over the next five years with multiple conditions. The mayor's administration later balked when the school system asked for a deal that acknowledged back taxes spanning more than three decades.

After Chancellor Jeffrey Atherton denied the city's motions, school officials asked for a summary judgment of $15.2 million in unpaid taxes dating back to 1980.